Customers deserting BSkyB following price hike

BSkyB viewers are continuing to quit the broadcasting group after the firm hiked prices at the end of last year.

The group's rate of "churn" - the number of customers leaving the group - soared to 13.7% in the three months to the end of March, far higher than the group's 10% target and up from the 11.9% seen in the previous quarter.

BSkyB played down the significance of the increase in churn, saying that the rate reflected the first full quarter of impact since it cut discounts to dissuade subscribers from leaving to return on a lower rate - a move aimed at reducing churn in the long-run.

The group, headed by media mogul Rupert Murdoch's son James Murdoch, said its retention strategy was "delivering valuable benefits to the quality and profitability of our business".

The numbers of customers signing up to BSkyB helped offset the high churn levels, with net new additions up by 28% year-on-year to 51,000 - higher than analysts were expecting, with forecasts pegged at just 25,000.

Analysts had predicted a modest rise in the number of new joiners after Sky axed channels including Sky One and Sky News on Virgin Media following a high profile breakdown in contract renewal negotiations between the two groups.

But the hike revealed was nearly double the number predicted in the market, bringing Sky's total number of customers to 8.5 million.